EU amended proposals for public country by country reporting (CBCR)
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EU amended proposals for public country by country reporting (CBCR)
EU amended proposals for public country by country reporting (CBCR)
Mon 10 Jul 2017
Background
In its last month in office, the Maltese presidency of the EU has issued proposals for an amended directive on public disclosure of income tax information by certain undertakings and branches. This is part of the EU’s desire to enhance public scrutiny of corporate incomes taxes borne by multinational enterprises (MNEs) operating in the EU. France Sweden and the UK have noted their requirement for parliamentary scrutiny of the proposals. The next six month period for EU presidency passes to Estonia on 1 July 2017.
Proposals
The proposed measure would apply to entities which have consolidated revenue in excess of €750m for two consecutive years, with the report being prepared for the second of those years and made available within 12 months of the year end. Where the entity of the MNE operating in the EU is a subsidiary or branch of a third country parent, the report must be made available to the extent the information is available to that subsidiary or branch. Where the information is not available, a subsidiary will need to explain why, as will a branch if branch turnover exceeds the limit. If the subsidiary exceeds the turnover threshold on its own, it will need to produce a report on its figures in any event.
Member States may permit the entity not to publish the data where this would be seriously prejudicial to their commercial position, this exception to last for a one year period, though it can be renewed.
There is also a requirement for the statutory auditor to state in its audit report after publication of the company CBCR report, whether the report on income tax information has been published or not.
On 4 July the European Parliament approved the proposal.
Point to note
This is a development that those assessing the source of data for existing country by country reporting requirements and how variations between expected and actual tax could be explained, might wish to consider in relation to their own reports.
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